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Mall owner would get sale price back in project

City Council to vote Tuesday on agreement

By Scott RochatLongmont Times-Call

Posted:
01/03/2013 06:40:51 PM MST

Updated:
01/04/2013 02:33:31 PM MST

Altogether, up to $27.5 million of Twin Peaks $80 million redevelopment could be covered by bonds issued by the city, the city s urban renewal district or the mall s special taxing district. The bonds would be repaid by the additional sales and property tax generated by a new mall, and by a levy on the mall itself.
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$27.5 million: Maximum amount of public funds in the project, to be repaid by tax-increment financing and a mill levy on the mall.

$8.5 million: Amount NewMark Merrill paid for the mall and that will be reimbursed to the company as part of the $27.5 million.

$0: Amount of public funds that will be released until NewMark Merrill meets certain standards, including signed leases for a 12-screen movie theater and a 100,000-square-foot general merchandise retailer.

LONGMONT -- NewMark Merrill Mountain States would get back the $8.5 million it paid for the Twin Peaks Mall in exchange for keeping the mall's redevelopment moving, under an agreement that comes before the City Council on Tuesday.

Half of that reimbursement would come when construction starts. The next 25 percent would come when all the public improvements are finished along with 75 percent of the "village," a cluster of retailers and public spaces. The rest would be paid only when the remaining work is done.

Altogether, up to $27.5 million of Twin Peaks' $80 million redevelopment could be covered by bonds issued by the city, the city's urban renewal district or the mall's special taxing district. The bonds would be repaid by the additional sales and property tax generated by a new mall, and by a levy on the mall itself.

Brad Power, the city's economic development director, said the staggered repayment to NewMark Merill both encourages work on the mall and makes it a more attractive property.

"It engenders more of an opportunity for the project to be financially viable, to attract the kind of tenants they're going after," Power said. "But there's performance standards for (the owners) to meet to get that and other public improvements paid for."

Public improvements include costs such as demolition, landscaping and infrastructure. Similar conditions are sprinkled throughout the agreement. For example, NewMark Merrill can get its demolition costs reimbursed, but no more than $500,000 will be repaid until construction begins.

If the agreement is approved by both the city and the mall owner, construction must start by Dec. 31. NewMark Merrill has already said it expects to begin work this fall.

"We anticipate it being much earlier than Dec. 31," Power said. If a delay occurs that is not the owner's fault, the start date can be extended by up to six months.

However, none of the public financing can start until the mall's owner has nailed down leases for its key properties. Those include:

Either a natural grocer occupying at least 28,000 square feet, or enough other tenants to compensate for it, including restaurants.

NewMark Merrill also must have final cost estimates on the project, a specific start date, a date at which the project would be 85 percent complete, and proof of enough financing to finish the job by the end of 2015.

Last December, Allen Ginsborg of NewMark Merrill announced that the mall had the general merchandise retailer under contract. The name has not yet been released.

The agreement anticipates that 70 percent of the mall work will be done by the end of 2014.

The council meeting begins at 7 p.m. in the civic center, 350 Kimbark St. The mall agreement is scheduled to be considered near the end of the agenda.

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